Employee Related Risk
First and foremost, in order to combat risk you have to find the right staff. Sometimes finding the right staff is more than just identifying the most qualified and offering them the highest salary. Sometimes the best fit for your business is not the person with the best resume, the most experience or the best education. Employee turnover can be very expensive. If you are looking for a person to be committed to the business it is in your best interest to ask pointed questions about the candidates short, medium and long term goals for themselves and the company. You should be very careful about the ways in which you state these questions because the wrong wording can cause your business to wind up in the middle of an employment lawsuit. Once you have found the right staff it is just as important to keep them satisfied enough to remain with your organization for an extended time. This includes not only salary and benefits, but determining what is important to them individually and finding creative, cost-effective ways to satisfy those needs.
Revenue/Financial Risk
Direct financial risks have to do with how your business handles money. Do you offer credit to a customer. Do you bill your customers after every interchange, monthly or quarterly? Keeping your income coming in from a diversity of clients and not just 2 or 3 can help prevent dramatic cuts in revenue from losing one client. Financial risks can also include interest rates and foreign exchange rates depending upon your industry. Having a plan in place for these risks will ultimately contribute to the long term success or failure of your business.
Operational Risks
Operational risks result in many ways. Many start with internal failures. An internal failure starts with the internal processes, people or systems and can cause damage internally or externally to clients and vendors as well. Operational risks can also result from unforeseen external events such as transportation systems, internet, power or communication systems failure. These can cause a delay in or failure to deliver goods or render services. Having a plan in place for when these situations arise is crucial to the long term success of your business.
Reputational Risk
Losing your company’s reputation or community standing can cause damage to your company that is not repairable. Reputations take a long time to build and they can be crushed at a moments instance. During a time when social media has the ability to cause negativity to spread like while fire more quickly than ever it is crucially important to constantly monitor your reputation. Your reputation is important both on and off line. google alerts is one way to monitor when and if your business is mentioned online, but there are also companies that offer software as a service products to monitor your businesses reputation and notify you quickly when damaging situations occur online. If you are going to have a presence on social media you need to have trained professionals to regularly monitor it and have systems in place for how to deal with negative reviews or comments.
